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Eco360 Supply & Demand Simulation

Supply and Demand Simulation
The Supply and Demand Simulation (UoP, 2005) presented in the Economics for Business 1 class revolves around the supply and demand of two-bedroom rentals in the imaginary city of Atlantis. To complete the simulation, the user must assume the role of a Property Manager for GoodLife Management, a property management firm that manages seven apartment complexes within Atlantis. As the Property Manager, the user must adjust rental rates as changes in supply and demand require or determine how many units to supply when rates become limited. The Supply and Demand Simulation (UoP, 2005) emphasizes several economic principles outlined by Colander in his book, Economics (2004), including the laws of demand and supply, equilibrium, the effect of a price ceiling, and shifts in demand and supply.
Laws of Demand and Supply
In the Year One scenarios, the simulation (UoP, 2005) demonstrates how rental rates affect the supply and demand for apartment units. In other words, price affects the supply and demand of available goods. The law of demand states that quantities demanded by consumers will increase as prices of a product decrease and the reverse is also true, quantities demanded by consumers will decrease as prices of a product increase, as long as all other factors remain constant. A demand curve shows an inverse relationship between the price of a product and how much of that product is demanded by consumers (Colander, 2004). So the demand for GoodLife's apartments will increase if GoodLife reduces the rental rate. The law of supply states that quantities supplied will increase as prices increase and decrease as prices decrease, as long as all other factors remain constant. The law of supply represents a direct relationship between prices and quantities supplied to consumers (Colander, 2004). This means that GoodLife will increase the number of apartments supplied if rental rates increase.
Equilibrium
In the Year Three scenario, the...